For months, Wall Street has been operating on the assumption that Hillary Clinton would be the next president.
With Friday's revelation that the FBI's investigation into her handling of emails while she led the State Department has new life, the election assumption is challenged — and the ramifications could be substantial.
"The bigger story is that she might enter office with an enormous cloud over her head," said Greg Valliere, chief global strategist at Horizon Investments and a widely recognized expert on the Wall Street/Washington nexus. "That's not a good story for markets, for the country. This could drag on for months and months."
Indeed, Clinton, whom polls also have indicated to be a strong favorite to win the Nov. 8 election, now faces a dual challenge: staving off Donald Trump down the home stretch, and preparing to face a daunting investigation immediately upon taking office should she win.
Markets recoiled at the news Friday, with stocks briefly selling off and several currency pair trades moving sharply. The Mexican peso plunged against the U.S. dollar, and the Canadian dollar also moved lower against the greenback.
What happens from here could well depend on Trump, Valliere said.
"Trump's been given all of these gifts — the Obamacare premiums (spike), the WikiLeaks story, and now this," he said. "Is he adroit enough to exploit these gifts that he's been given?"
